Did Mitt do a flip on the flat tax?

posted at 2:05 pm on August 17, 2011 by Jazz Shaw

Katrina Trinko highlights an interesting, if somewhat back-burner item this week at National Review regarding Mitt Romney and his history on tax reform issues. Some of what she digs up is really rather startling, or at least it should be to fiscal conservatives.

In 1996, Mitt Romney was so passionately opposed to the flat tax that he took out an ad in the Boston Globe to criticize Steve Forbes’ flat tax proposal. “The Forbes tax isn’t a flat tax at all — it’s a tax cut for fat cats!” Romney, labeling himself a “concerned citizen,” wrote.

But in Plymouth, N.H., today, Romney made a statement that suggested he might be changing his position. “The proposals that I’ll be putting out this fall will talk about bringing our tax rates down, both at the corporate level and the individual level, simplifying the tax codes, perhaps with fewer brackets. The idea of one bracket alone would be even better in some respects,” Romney said.

He went on to stress that he didn’t want to provide tax cuts to the rich (which seems to have been his main concern about a flat tax back in the day), but it’s hard to see how “the idea of one bracket alone” is anything other than a flat tax.

Wow. A “tax cut for fat cats?” Was that Mitt Romney or Howard Dean talking?

This “new” position certainly does look different. But it’s always hard to tell these days when any politician begins talking about tax reform. There was a time when the meaning of that phrase was fairly unambiguous and something of a national movement formed around it. Not everyone had the same plan, mind you. Some favored a flat tax, others a national VAT. Still others invented complicated hybrids of various schemes. But all of them at least seemed to agree that the tax code as it stands today is broken, and jettisoning the entire thing might not be such a bad idea.

Today, however, the phrase “tax reform” has been adopted by a variety of groups and it always indicates secret code for one thing or another. When Obama and Joe Biden talk about “tax reform” or “closing loopholes,” it’s shorthand for additional revenue or, if you prefer, tax increases. This may be good or bad depending on your preferences, but it’s not really reform.

Further, Obama is hitting the trail this week with his laundry list of complaints about “things congress could be doing right now” if they weren’t such a hopeless bunch of political hacks. But if you listen closely, nearly every one of his proposals involve even more deductions, exemptions and changes which further complicate the tax code rather than simplifying it.

One thing remains constant. Tax reform is pretty much like the weather. Everyone likes to talk about it, (at least during campaign season) but nobody ever does much of anything about it.

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A Flat Tax may not be a tax cut for fat cats, but it places too much of the tax burden on the lowest earners. It’s unacceptable, and unfair. Lower tax rates across the board is the answer. But not a flat tax.

The highest brackets get much of their income from capital gains anyway, and if they are high-income W2 earners, they are exempt after about $100,000 in salaried income from the Social Security tax.

I don’t mind a change in position over 15 years. But acknowledge the change and why you changed. I’ve changed my position on numbers of things since college — it’s called real life and government doesn’t work too well. Hence, a new desire for less government.

One thing remains constant. Tax reform is pretty much like the weather. Everyone likes to talk about it, (at least during campaign season) but nobody ever does much of anything about it.

If the super committee doesn’t come up with a lot of spending cuts. There are going to be automatic cuts in spending. When that happens tax reform will push it’s self front and center into the so called law maker’s laps. It will be interesting to watch how fast they move when they have the spending cut axe hanging over their heads. It’s not as if they can just do spending cuts without tax reform.

For an effective, revenue neutral way to collect taxes less subject to business cycles we should move to the FairTax.
Learn more about the FairTax at http://www.fairtax.org.
in_awe on August 17, 2011 at 2:24 PM

Any giant sales tax like that is going to encourage massive tax fraud via the black market. Income taxes are much more trackable.

What I want to know is how many would change their political affiliation if we just raise taxes on democrats and other leftest groups only and earmark that money for the things they want government to pay for?

When Obama and Joe Biden talk about “tax reform” or “closing loopholes,” it’s shorthand for additional revenue or, if you prefer, tax increases. This may be good or bad depending on your preferences, but it’s not really reform.

This is a stretch. Changing from being against Steve Forbes flat tax to being in favor of a “flatter tax” is not some earth shattering flip flop. Allow candidates to evolve to the right…which is much better than evolving left (Crist etc)

every U.S. adult citizen will get a monthly “prebate” check that is (roughly) equal to the tax that is paid on the “necessities of life”.

Until now, I never heard of the “prebates.” Not that I’m impressed.

But where does the money come from? And then, who decides what are necessities, and what are not? Some government agency?

The Fair Tax may have an appeal to Libertarians like Neal Boortz, but like most Libertarian ideas, it can’t exist in the real world. There will be no enforcement. Black markets will spring up.

In addition, the estimates of how high the fair tax would have to be seem too low.

The Fair Tax will no longer punishment achievement and saving/investing, as the current income tax does.

Today, the thing that discourages saving is not the tax code but the Federal Reserve artificially suppressing interest rates. The thing that discourages investing is a stock market dominated by program trading.